FDIC Updates Formal and Informal Enforcement Actions Manual

On July 25, 2022, the FDIC announced updates to Chapters One and Four of its Formal and Informal Enforcement Actions Manual concerning the FDIC’s minimum standards for terminating cease-and-desist orders issued under Section 8(b) of the Federal Deposit Insurance Act.  

Among other technical changes, the updates clarify that Section 8(b) cease-and-desist orders may be considered for termination under any of the following conditions:

• the insured institution is in full (not “substantial”) compliance with all provisions in the order and has fully corrected the violations, practices, or conditions that led to the issuance of the order;
• any provisions deemed “not in compliance” with the order have become outdated or irrelevant; or
• any provisions deemed “not in compliance” with the order have deteriorated, leading to the issuance of a new or revised formal action.

The FDIC also notes that there may be rare and limited exceptions where an enforcement action may be replaced with a less severe or less comprehensive action upon request to the appropriate Division Director and General Counsel and upon consultation with the Chairman.